Defining Equitable Distribution in New Jersey

When talking about divorce settlements, New Jersey is an equitable distribution state.  But what does that mean?

Equitable means “fair,” not “equal.” How is a settlement calculated if it is not a 50/50 split between spouses?  The main idea is that marriage is a financial affiliation. The division of assets and child custody are the two most commonly disputed parts of a divorce.  Your divorce attorney can help guide you through the process and ensure you receive a fair portion of the family assets.

How Is Equitable Distribution Determined in New Jersey?

Defining Equitable Distribution in New JerseyThere are three steps involved in equitable distribution:  determining which assets are marital and which are individual, evaluating the property’s worth, and the distribution of the assets. The main principle of the Law of Equitable Distribution is that within the marriage, there is an economic partnership.  Spouses contribute to the value of that partnership as a breadwinner, domestic engineer, parent, and spouse.  To put it bluntly, the process decides what the assets are, to whom they belong, and who gets what part of their value.

Step One

Marital assets are those which were obtained during the marriage. If a couple purchased a home in contemplation of marriage, it is usually considered a marital asset. Whether only one spouse’s name is on the deed or only one spouse contributed to the mortgage payments is inconsequential.  If one spouse purchased the home before a committed relationship had begun, that is not necessarily intended as a family home; it could be considered a separate asset depending on the length of the marriage and other factors.  Property bestowed on a spouse as inheritance or a gift is a separate asset.  If a spouse owned a business and the profits have significantly increased, that increase could be subject to equitable distribution if the other spouse can give proof that was it not for their help, the business would never have been successful.  Similarly, a house received as an inheritance that had extensive remodeling by the couple, to which both contributed, the increase in value could also be a part of equitable distribution.  Some other items which are usually seen as marital property are the family home, investment properties, debts, vehicles, employment benefits such as stock options or pensions, business assets, cash, checking and savings accounts, stocks, and bonds, valuables such as jewelry, musical instruments, furniture, china, couture clothing, and life insurance, among many others.

Step Two

Once the items subject to equitable distribution are listed, their value must be determined by the spouses, their lawyers, and/or an appraiser who can assign an approximate monetary worth of accounts, vehicles, investments, properties, jewelry, and more. This process is called the discovery, and parties are obligated to disclose financial statements, including tax forms, bank statements, pensions, contents of safe deposit boxes, and stocks and bonds. It is vital that both spouses be as transparent and honest as possible, not causing any delays by missing deadlines or submitting only part of the information necessary.  An attorney can be of enormous help during this phase.

Step Three

Now that the assets have been characterized as marital or separate, and their values have been calculated, the distribution process is next. There is a list of guidelines that are typically used to make the distribution of assets as fair as possible:

  • The needs of the children
  • The standard of living during the relationship
  • The debts of each party
  • Income and earning potential such as work experience, training, academic degrees, professional licenses, raising the children, and what would be needed to be self-sufficient
  • How long the marriage lasted
  • Economic situation for each party
  • Any written agreements such as prenuptial or post-nuptial agreements
  • Age and well-being of both parties (emotional and physical)
  • Contribution of each party to properties purchased or remodeled, which includes being a homemaker
  • Changes in tax payments as a result of the distribution
  • Anything else the court deems pertinent.

Frequently, a party would like the distribution of assets to reflect any bad behavior or unscrupulous activities committed by the other spouse, but unless one spouse went on a gambling spree or emptied all of the accounts while the marriage was in jeopardy, that behavior is not taken into account.  Taking out loans or burning through credit cards, however, could affect the distribution of assets.

Equitable Distribution and Divorce Attorney in Linden, New JerseyIt is generally recommended that the assets be sold and the debts paid.  One spouse can buy the other out of their share of the home, but then a new mortgage must be made, and often the financial burden is too much for one person.  If the house payments are not made while the loan is still in both partners’ names, the credit scores for both people will be negatively affected.

Of course, having a prenuptial agreement certainly makes the process easier, but it is not an ironclad guarantee that everything will work out as planned.  The judge will weigh it heavily as evidence and decide accordingly based on many of the factors listed above.

Don’t Tackle Equitable Distribution Your Own, Contact our Linden Office and schedule a consultation with Mr. Edward Cooper to assist you.

If you or someone you know is getting a divorce, you need a lawyer who knows exactly how to help you to prepare. The process of equitable distribution is in no way cut and dried.  There are so many pieces of information, statements, appraisals, and more that need to be gathered. Forgetting some key piece of documentation or missing a deadline isn’t something one can afford to do. Some nuances and exceptions can muddy the process.

No one gets married thinking about divorce, but it is a reality in today’s world. Edward Cooper´s Law Office has dedicated more than 30 years to the practice of family law, and he makes a complicated process less overwhelming and works with you directly. If you live in Metuchen, Westfield, Summit, Cranbury, Mountainside, and places around Middlesex and Union Counties do not hesitate to get in contact with our staff to schedule a consultation with Mr. Cooper.

Contact his office today at (908) 481-4625 or book a consultation online to find how we can help you through this process.